The government has promulgated the ordinance amending the Mines and Minerals (Development & Regulation) (MMDR) Act, 1957, the MMDR Amendment Ordinance, 2015 to allow auction policy in grant of mining leases for both bulk minerals and notified minerals. Earlier, prior approval of the Central government was required for notified minerals in First Schedule, such as iron ore, manganese, bauxite, copper, gold.
The President approved the ordinance on Monday. This is the ninth ordinance issued by the National Democratic Alliance (NDA) government and promulgated by the President under Article 123 in a little over seven months of its tenure. The Coal Mines (Special Provisions) Ordinance, has been promulgated twice.
The most recent ordinance amends the 1957 Act to allow grant of mines and prospecting licence-cum mining lease through a policy of auctions. Further, it will allow for the holder of a mining lease or of a prospecting licence-cum-mining lease to transfer mining lease or the prospecting licence-cum-mining lease, to any person eligible to hold such mining lease.
“To attract private investment and modern technology in mining, it will be possible to transfer mining leases and prospecting-cum-mining leases awarded through auction by the approval of State government. Where the State government does not convey any decision in 90 days in this regard, it will be taken as deemed approval,” noted the Ministry of Mines.
The ordinance grants longer tenures over mines, increasing the period from 30 years to 50 years. The ordinance removes the concept of renewal of leases and after the end of the lease period, leases will be auctioned. Other than royalty, leaseholder will pay an additional amount to a District Mineral Foundation (DMF). This fund is to be used “for the benefit of people and areas affected by mining activities.” There is a provision for contribution to the DMF not exceeding one-third of the royalty rate in the respective minerals.. The ordinance proposes a National Mineral Exploration Trust for which leaseholders will be required to contribute two percent of royalty. To deter illegal mining, the punishment has increased to imprisonment upto five years, or a fine of Rs 5 lakh per hectare or both. Further, it provides for the State governments to constitute Special Courts for trial of offences of illegal mining.
